Analysis Of The Real Estate Mortgage Disputes Among Two Banks And A Real Estate Company

Housing and land are treated as a separate property under the legal system ofChina. After the promulgation of Real Right Law of the People’s Republic of China(hereinafter referred to as the Real Right Law), it provides the principle that amortgagor may at the same time mortgage his house ownership and his land-use righttogether when it comes to the real estate mortgage. However, most people did notapply the principle in practice and it cause a heat debate in the academic and practicalcircles. The case included in this article is mainly about a real estate company, as adefendant, cause the disputes for it is unable to discharge its financial obligationswith two banks(the plaintiffs). There are three points at issue in the case shows below:If both the mortgages between the Company and two banks are valid or not; Wetherthe two banks have the right of priority of payment on the housing or land pertains tothe property mortgaged; What’s the repayment order on the hypothecated assetsbetween the two banks. Based on the facts established by the court and understandingof the existing law concerned, it is valid if a mortgagee only mortgage the land orhousing with the creditor, for it is the products reflect the will of both parties and theterms of such contracts do not violate the mandatory provisions of the law concerned.Creditors have the prior claim to discharge their debts on the registered collateral onthe condition that both the ownership of the build and the land-use right belongs to thesame person. But, there is no mandatory requirement to ensure only one man to be thefinal owner, so it is possible that there are more than one people to become the owner.This requires many attentions payed by the legislators so that relevant rules can bemade.